Westminster Labour Councillors say introducing a small Tourist Tax on hotel bedroom occupancy could raise over £25 million a year and help to pay for the costs of keeping the city attractive and providing the everyday public service which visitors expect to see.
A Tourist Tax would help to pay for the cost of providing facilities which tourists enjoy – keeping the environment clean and tidy, maintaining parks, street lights and open spaces, public toilets, policing and emergency services, as well as cracking down on illegal short-lets.
In Westminster, the state of public toilets is appalling with many toilets in the West End and other parts of the city closed or poorly maintained by the private operator. The estimated £2 million a year cost of running Westminster’s public toilets to a high standard could be paid for via a Tourist Tax.
In addition, some of the revenue could also be spent on policing short term lettings to ensure that unauthorised short term letting is stopped. Currently, there are real problems across Westminster with unscrupulous landlords ‘turning homes in to hotel rooms’ because of the increased revenue they can generate.
How it might work
Parliamentary legislation would be required to enable a Tourist Tax to be levied. Not every local authority will want to charge. Each local authority could choose to adopt the Tourist Tax – it would not be compulsory.
In the rest of Europe and the rest of world, a Tourist Tax is common place
Charges in Paris, Rome and Venice relate to how many stars the accommodation has, with 5-star accommodation paying the most. Berlin charges 5% of the accommodation cost. Lisbon charges a flat rate per person per night. Children under 10 do not pay and there is a 50% reduction for 10-16 year olds.
Homeless families living in temporary B&B accommodation would not pay
How much might be raised?
There are approximately 450 hotels in Westminster providing 40,000 rooms. In addition, in 2017, there were about 3,600 Airbnb short term lets in Westminster.
Based on the Paris, Rome and Venice model of 5-star accommodation paying the most and a charge of £1 tax per star per night, annual gross revenue might be in the order of £25 million. Alternatively, with a flat rate of say £3 per room per night whatever the star rating, revenue would be higher at around £30 million
How might he Tourist Tax be collected?
This would need to be kept simple and straightforward. Each hotel and Airbnb operator would need to register with the Council and provide details of the hotel star grade and number of rooms. We would expect Airbnb accommodation to be be given a notional 3 star rating.
The tax would be paid monthly to the local authority, based on the number of rooms occupied per night.
How would decisions be made about spending the money?
This would need to be totally transparent. The Council would prepare a 3-year strategy for using the funds raised by the Tourist Tax and consult with the local tourist sector and the public in the process. The strategy would be reviewed annually
Councillor Paul Dimoldenberg, Labour’s Environment and City Management spokesperson, said:
“Tourism is a very important part of Westminster’s economy. But, there are also costs of keeping the city attractive and providing the everyday public service which visitors expect to see. A small Tourist Tax would help to pay for the cost of providing facilities which tourists enjoy – keeping the environment clean and tidy, maintaining parks, street lights and open spaces, public toilets, policing and emergency services.
In addition, the cost of more regular collections of rubbish could be financed by a small Tourist Tax and would transform the street scene across Westminster for everyone. Additional Public Realm improvements could be paid for out of the Tax, as well as anti-pollution and recycling initiatives and cracking down on illegal short lets..”
“We will be taking forward this initiative with Council Officers and would like to hear the views of local residents, amenity societies and businesses.”
For further background information
In 2011, Westminster Conservatives aired the possibility of a Tourist Tax but did not take it further https://www.standard.co.uk/news/tax-on-sleep-in-west-end-hotels-6369728.html
In 2015, Camden also considered lobbying for a tourist tax https://www.theguardian.com/uk-news/2015/jan/07/london-tourists-could-face-bed-tax
In Bath, there is cross-party agreement on the idea https://www.theguardian.com/uk-news/2018/jan/10/bath-revives-plan-to-impose-tourist-tax
Recently, it was reported that Edinburgh is considering a Tourist Tax https://www.theguardian.com/uk-news/2018/jun/27/edinburgh-legal-powers-tourist-tax-hotels